Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant sets Common stock, $10 par value Retained earnings Total liabilities and equity Interest expense Income tax expense Total costs and expenses Net income Earnings per share Current Yr 1 Yr Ago 2 Yrs Ago $ 31,800 $ 35,625 $ 37,800 89,500 62,500 50,200 112,500 82,500 54,000 10,700 9,375 5,000 278,500 255,000 230,500 $523,000 $445,000 $377,500 The company's income statements for the current year and 1 year ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses $129,900 $ 75,250 $ 51,250 83,500 98,500 101,500 163,500 163,500 163,500 131,100 104,750 79,250 $445,000 $377,500 $523,000 $411,225 209,550 12,100 9,525 Current Yr $673,500 642,400 $ 31,100 $ 1.90 1 Yr Ago $345,500 134,980 13,300 8,845 For both the Current Year and 1 Year Ago, compute the following ratios: $ 532,000 502,625 $ 29,375 $ 1.80 (1) Debt and equity ratios. Current Year: 1 Year Ago: Current Year: 1 Year Ago: Choose Numerator: Choose Numerator: 1 1 1 1 1 Debt Ratio 1 1 1 Choose Denominator: Equity Ratio Choose Denominator: = II = || = 11 = II Debt Ratio Debt ratio Equity Ratio Equity ratio % % % % (2) Debt-to-equity ratio Current Year: 1 Year Ago: Choose Numerator: Debt-To-Equity Ratio / 1 1 1 Choose Denominator: = = Debt-To-Equity Ratio Debt-to-equity ratio to 1 to 1 Times interest earned. Current Year: 1 Year Ago: Choose Numerator: Times Interest Earned / Choose Denominator: / 1 1 II II II Times Interest Earned Times interest earned times times Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Times interest earned Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant sets Common stock, $10 par value Retained earnings Total liabilities and equity Interest expense Income tax expense Total costs and expenses Net income Earnings per share Current Yr 1 Yr Ago 2 Yrs Ago $ 31,800 $ 35,625 $ 37,800 89,500 62,500 50,200 112,500 82,500 54,000 10,700 9,375 5,000 278,500 255,000 230,500 $523,000 $445,000 $377,500 The company's income statements for the current year and 1 year ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses $129,900 $ 75,250 $ 51,250 83,500 98,500 101,500 163,500 163,500 163,500 131,100 104,750 79,250 $445,000 $377,500 $523,000 $411,225 209,550 12,100 9,525 Current Yr $673,500 642,400 $ 31,100 $ 1.90 1 Yr Ago $345,500 134,980 13,300 8,845 For both the Current Year and 1 Year Ago, compute the following ratios: $ 532,000 502,625 $ 29,375 $ 1.80 (1) Debt and equity ratios. Current Year: 1 Year Ago: Current Year: 1 Year Ago: Choose Numerator: Choose Numerator: 1 1 1 1 1 Debt Ratio 1 1 1 Choose Denominator: Equity Ratio Choose Denominator: = II = || = 11 = II Debt Ratio Debt ratio Equity Ratio Equity ratio % % % % (2) Debt-to-equity ratio Current Year: 1 Year Ago: Choose Numerator: Debt-To-Equity Ratio / 1 1 1 Choose Denominator: = = Debt-To-Equity Ratio Debt-to-equity ratio to 1 to 1 Times interest earned. Current Year: 1 Year Ago: Choose Numerator: Times Interest Earned / Choose Denominator: / 1 1 II II II Times Interest Earned Times interest earned times times Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Times interest earned
Expert Answer:
Answer rating: 100% (QA)
Question 1 a Debt Ratio Total Liabilities Total Assets Total Liabilities Accounts payables Long term ... View the full answer
Related Book For
Financial Accounting Information for Decisions
ISBN: 978-1259533006
8th edition
Authors: John J. Wild
Posted Date:
Students also viewed these accounting questions
-
Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets $ 29,328 83,351 103,760 9,078 257,087 $ 32,285 $ 34,323 57,663 76,967 8,737 240,386 Cash 45,764...
-
Q1: You bought a small cap, illiquid stock 6 months ago, paying $1,734.55 per share. Two weeks ago, due to some unexpected financial pressures, you needed to sell the stock, with some urgency. You...
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
What are the possible coping strategies that could help freelancers to overcome financial challenges and improve their financial well-being? Is there any significant impact in the financial...
-
Propose a mechanism for nitration of pyridine at the 4-position, and show why this orientation is not observed.
-
Jeannette Phan is a college student who has just completed her junior year. The following table summarizes her grade point average (GPA) for each of the past nine semesters: (a) Forecast Jeannettes...
-
Describe events. Provide an example.
-
Hartwell Drug Company produces a supplement to improve bone density. Conversion costs are added evenly throughout the production process. The following information is available for March: Required a....
-
Concord Corporation began operations in July 2022. At the end of the month, the company prepares monthly financial statements. It has the following information for the month. 1. At July 31, the...
-
Using the approach described in Example 10.6, classify first record in the worksheet Records to Classify in the Excel file Credit Risk Data using the k-NN algorithm for k = 1 to 5. Use only Checking,...
-
Write the chemical name and formula of marble. (b) It has been found that marbles of Taj are getting corroded due to development of industrial areas around it. Explain this fact giving a chemical...
-
Laura Neilson, a job specialist with Vocational and Educational Services for Individuals with Disabilities, responded to an advertisement in a New York newspaper for a position as a shower, a job...
-
Copeland Hotels Ltd provide three levels of rooms in their hotels. The following planning data are provided for the year ended 31 December 2020: Fixed hotel overhead costs are $24 360 000 per year,...
-
Kelly Services is an employment agency that places individuals in temporary positions. Kelly makes placements in accordance with business clients needs and preferences. Asthma Suliman, a Muslim...
-
A smart contract is a computerized transaction protocol that executes the terms of a contract. The general objectives are to satisfy common contractual conditions (such as payment terms, liens,...
-
DJ Slick was a radio show host on WLTO-FM, based in Lexington, Kentucky. As a promotional, he announced that he would reward loyal listeners with a chance to win one hundred grand by calling the...
-
Using the critical point, PC = 80.0 bar and TC = 512 K, what is the vapor pressure of methanol at 375 K? (Answer in bar.) Properties of methanol Thermal expansion coeff () 1.30E-03 isothermal...
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
Hallam Company's financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31,...
-
Access the March 26, 2015, filing of the 10-K report of Home Depot for the year ended February 1, 2015, from www.SEC.gov (ticker HD). Refer to Home Depot's balance sheet, including its note 4 (on...
-
Volkswagen Group reports the following information for property, plant, and equipment as of December 31, 2014, along with additions, disposals, depreciation, and impairments for the year ended...
-
In testing a claim about a population mean, a larger z test statistic always results in a larger P-value. Decide whether the statement makes sense (or is clearly true) or does not make sense (or is...
-
In testing the claim that the mean IQ score of statistics students is greater than 100, the alternative hypothesis is expressed as > 100. Decide whether the statement makes sense (or is clearly...
-
A handy mnemonic for interpreting the P-value in a hypothesis test is this: If the P (value) is low, then the null must go.
Study smarter with the SolutionInn App